By many indications, the S&P downgrade of America doesn’t make much sense.
Just to make it perfect, it turns out that S&P got the math wrong by $2 trillion, and after much discussion conceded the point — then went ahead with the downgrade.
As others have noted, these are the very same people who were rubber-stamping absolute junk mortgage-backed securities as if they were investment grade material back in 2007 and 2008. This is like an alcoholic advising us on how to be a moderate drinker.
That said, there is obviously something wrong with America’s economy, and it has been for some time. What ails us is conservative in nature. The idea that we can cut the taxes of our richest citizens without investing in the future for the rest of us.
When times get bad, the upper echelon doesn’t really suffer. Sure, their mutual funds may fluctuate, and they may be forced to take one less mediterranean cruise this year, but they aren’t facing the decisions that confront the middle class of America. Decisions like “how much can we eat” or “can we pay our rent/mortgage”. The fact that this is happening while conservative groups like the Heritage Foundation are telling America’s poor to thank God for good they have it is perverse.
It doesn’t help when both parties buy into this economic folly. Sure, the Democrats are somewhat better than the Republicans in that they don’t actively try to destroy the economy, but both President Obama and President Clinton show and have shown an admiration for failed conservative economic policies that sometimes end up being destructive to the middle class in the style of George W. Bush or Ronald Reagan.
At some point it has to end. Clearly the economic collapse of 2008 hasn’t been the jolt our leaders – and our citizens – need to bring about the common sense policies they are just unwilling to enact. The solutions to what ails America and the world aren’t super-complicated. They just need to get done.
But dishonest economic downgrades aren’t helpful, either.